October 26, 2012

Realty comes back to bite the Pawar family


Intriguing tale of corruption if not tragic for the country...only if similar energy had been used for nation building

Lavasa has put the spotlight back on Sharad Pawar and his daughter Supriya Sule. But there are three other equally scandalous realty projects involving the Sules where the family used its influence to illegally grab government land
By Ashish Khetan
IN A recent interview to a television news channel, Congress General Secretary Digvijaya Singh spelt out what was until now an unwritten code in Indian politics. In a moment of candour, Singh said that the Congress never questioned the business dealings of former prime minister Atal Bihari Vajpayee's foster-son-in-law Ranjan Bhattacharya, though it had enough reasons to do so. The personal fortunes of Bhattacharya, who had started his career as a management trainee with Oberoi Hotels, rose exponentially during the sixyear- long rule of the BJP-led NDA. Today, Bhattacharya owns a chain of ultra-luxury hotels, besides prime properties in several metros. It is an astonishing rags-to-riches story, but one that has largely been confined to drawing room conversations.


Former cop-turned-lawyer alleges quid pro quo between Sharad Pawar and Lavasa construction company

What Singh implied was that Bhattacharya's extraordinary riches also warranted a similar public scrutiny and brouhaha as the one we are now seeing over Sonia Gandhi's son-in-law Robert Vadra's dubious real estate deals. But the Congress chose to remain silent. This long-observed code of silence among top politicians as per which they almost never darted arrows at each other's families or questioned their business interests seems to have finally been breached.

When India Against Corruption (IAC) members Arvind Kejriwal and Prashant Bhushan started reeling off the staggering list of prime real estate amassed by Vadra in a short span of time, they were giving voice to what almost everybody in Delhi's power circles knew of but never chose to raise in public. Until now, the unwritten rule was that close relatives of top political dynasties were free to build their business empires on the strength of shady deals and out-of-turn favours from the government and private firms without having to answer to either any law enforcement agency or tax authorities.

By and large, the media too observed this code. So when TEHELKA's Operation West End tapes spoke of Bhattacharya's alleged undue influence in defence deals, or later when evidence surfaced of his involvement in the UTI scam, the stories created a temporary flutter but were not followed up with the rigour and perseverance they deserved.
Similarly, two years ago, when some RTI activists dug up documents which revealed that Maratha strongman and NCP President Sharad Pawar's daughter Supriya Sule and son-inlaw Sadanand Sule held more than 20 percent stake in the scandalous Lavasa project, questions of propriety were raised. Lavasa is a massive township being built over 19,000 acres situated 65 km from Pune. From the very beginning, Pawar had actively lobbied for the private hill city without ever disclosing that his family was a major beneficiary in the project.
But soon the questions of probity and conflict of interest slipped through the cracks. Pawar was successful in giving it the colour of a political witch-hunt. When the then Minister of Environment and Forests, Jairam Ramesh, highlighted the gross violations of green laws, Pawar accused him of being unreasonable. Crucial questions involving Pawar's role in the alleged irregularities, the source of funds with which the Sules bought the stake, the amount for which the stake was bought and later sold were never probed or reached any court of law.
Besides the media's reluctance to doggedly pursue the story to some logical end, one of the other main reasons why the story died a quiet death was the silence observed by the Opposition. The Congress' silence could be explained by the fact that Pawar was and is their important ally, both at the Centre and in the state, but the inertness of the Shiv Sena and the BJP was scandalous to say the least.

Last year, TEHELKA did a cover story (Maharashtra on Sale by Ashish Khetan, 28 May 2011) exposing in detail how the politician-builder nexus in the state had plundered prime land. TEHELKA exposed several scandalous land deals in which the leading politicians from the Congress and NCP had a role to play. The story produced prima facie evidence of corruption against former CM Ashok Chavan, the then rural development minister Vilasrao Deshmukh, Sharad Pawar, Supriya Sule and former irrigation minister Ajit Pawar. The story laid out in great detail over a dozen land scams, each running in several hundred crores of rupees. But the story found no takers in the Opposition parties.
But it now seems that the era where a few select public figures were seen as being beyond scrutiny and reproach is coming to an end. In the past 10 days, we have seen an unprecedented public spotlight on the excesses of money and power. First Vadra, then Salman Khurshid, and finally BJP President Nitin Gadkari were hauled over the coals for what many see as flagrant misuse of power.

On 18 October, lawyer and former cop YP Singh exposed the quid pro quo between the Pawar family and Ajit Gulabchand, the chairman of Hindustan Construction Company, who is the brain behind Lavasa. Singh produced documents showing that Pawar's nephew Ajit Pawar, who was the Maharashtra irrigation minister between 1999 and 2010, gave away 341 acres of irrigation land — which was acquired from the farmers for constructing dams and canals — to a holding company of the Lavasa project at the rate of Rs 23,000 per acre per year for a period of 30 years.

According to a Supreme Court judgment, the government should have auctioned this land. The Sules held 20.81 percent shares in this holding company. Later, the couple sold their stake for an undisclosed amount. Singh suggested that the Sules must have made Rs 1,000-Rs 2,000 crore from the sale. But in 2009, in an affidavit filed before the Election Commission, Supriya declared her total assets to be just Rs 15 crore. Singh asked where has the money gone?

In this story, TEHELKA is piecing together the details of three other equally scandalous real estate projects in which the Sules hold substantial stakes. The couple have stakes in as many as three IT parks — one completed and the other two under construction — which have allegedly been constructed on vast stretches of public land in the heart of Pune. Land meant for a mental hospital, affordable housing for the poor, a residential colony for the widows of jawans and a district jail has been allegedly usurped by the companies associated with the Sules.
It is alleged that these lands have been illegally grabbed by using the alleged influence of political power that the Pawars wield in Maharashtra. The charges against these companies range from fudging of revenue records and fraudulent documentation to manipulation of executive orders. The Sules have gained or stand to gain thousands of crores of rupees from these real estate projects.

The prima facie evidence available against the Sules seems extremely credible and warrants an urgent intervention either by the higher courts or by a high-powered investigation team that is free from political meddling. Evidence shows that the entire government machinery — from district collector to chief secretary — was complicit in these alleged land scams.
For the past two years, Pune-based RTI activist Ravindra Barhate has accumulated a mountain of documents that reveal the questionable ways in which the Sules and their business partners have acquired astonishing gains from alleged land scams. On a couple of occasions, Barhate has been successful in prodding the Opposition to raise the issue in the Maharashtra Assembly. But overall, his revelations have been met with a deafening silence. Save a few exceptions, the Marathi media too has chosen to downplay the revelations.
The details of the alleged scams narrated below would show that the accusations against the Pawar family are far more substantive and incriminating than those levelled against Gadkari. It's a pity though that the IAC failed to highlight the undue gains running into thousands of crores of rupees given to Gadkari's crony and BJP MP Ajay Sancheti by Ajit Pawar in Maharashtra and Raman Singh in Chhattisgarh.

What lies at the centre of this TEHELKA story is the loss of hundreds of crores of rupees to the public exchequer and the massive undue gain to the Pawar family.
How a company in which the Sules have a stake allegedly grabbed government land worth Rs 2,000 crore
• Government land measuring more than 8.79 lakh sq ft in the heart of Pune has been allegedly grabbed by a company in which Sadanand Sule has a substantial stake

Prime property The IT park under construction on the Airport Road in Yervada, Pune. The project is owned by Prem Sagar Hotels, in which Sadanand Sule has 10 percent stake
• The Sules are constructing an IT park on the said land
• 17.5 lakh sq ft of developed commercial area would be on sale once construction is completed
• Rs 2,000 crore is what the company would make from the sale of the property once it is developed. The Sules would get a substantial portion of the expected revenue
• It is alleged that if the law had been followed, the said land should have been used for constructing affordable housing for the poor. Records show that the scam started with builder Purshottam Patil. He allegedly manipulated revenue records and fudged the Urban Land Ceiling (ULC) orders
• Patil originally bought this land from a member of a Scheduled Tribe called Ramoshi in 1985. It was government land that was originally alienated in the name of the Ramoshi tribe for their sustenance
• As per law, the builder could not have bought this land without the district collector's permission. But he fudged the records and took over the land after paying a paltry Rs 9 lakh
• Balewadi Properties, the company in which the Sules own substantial stake, bought this land from Patil for Rs 48 crore on 24 October 2007. Now, the market rate of the land is more than Rs 500 crore. The throwaway price at which the deal was struck raises suspicion that the Sules were aware that it was fraudulently-acquired public land
• A cursory due diligence would have shown that the land should go to the government as surplus land under the ULC Act
• But the company not only failed to do any due diligence, it further perpetuated the scam by forging more documents. It furnished a fake ULC order number in the sale deed to bypass the law. Shockingly, the government authorities turned a blind eye to the alleged scam all along
Land meant for a mental hospital and a residential colony for the widows of jawans has been allegedly usurped by companies associated with the Sules
• In July 2012, RTI activist Barhate procured the documents related to the land under RTI and exposed the scam. He also registered a complaint with the authorities concerned. He showed that the ULC order number mentioned in the sale deed actually belonged to the private bungalow of another Pune-based builder. Barhate demanded a criminal probe besides the deal's cancellation
• The Pawar family didn't respond to the allegations. By and large, the media in Maharashtra also ignored the story. The national media didn't cover the story at all
• The revenue authorities have not responded to the allegations despite several representations made by Barhate. But the Pune Police Commissionerate has ordered an inquiry into the alleged fraud by the Sules' companies
• When TEHELKA contacted Supriya for her reaction, we were told to contact Atul Chordia, her Pune-based business associate. Initially, Chordia denied that the Sules own a stake in Balewadi Properties. But when TEHELKA emailed him the structure of different holding companies behind Balewadi Properties and the fact that Sules have stakes in these holding companies, Chordia failed to respond. On the other allegations, he refused to go into the specifics and merely responded by saying: "We have all the required permissions from the collector and the municipal corporation and a proper due diligence has been done before buying the land. We see no issue with the title."
Sules' company Prem Sagar Hotels illegaly occupied prime land worth Rs 600 crore in Pune
• In September 2004, Prem Sagar Hotels bought 5.3 lakh sq ft from Sir Kikabhai Premchand Trust. The land is located at Airport Road, Yervada, which is one of the most expensive localities in Pune
• As per law, trusts are not permitted to sell the land allocated to them by the government for charity purposes. The trust in question was given the land in 1939 on an occupancy price of a mere Rs 7,815 for the purpose of running a sanatorium. The title of the said land was never transferred to the trust. In revenue records, the Pune Collector continued to be the owner of the said land
• Prem Sagar Hotels paid just Rs 35.7 crore for the said land. If the company had bought a similar land in the open market, it would have cost them around Rs 600 crore. Neither was the trust authorised to sell the land that rightfully belonged to the government, nor could any private company or individual have bought the land from an entity that didn't have a clear title

Raising a storm Manohar Gajarmal (left) filed a land-grab complaint against Ajit Pawar's cousin Srinivas; RTI activist Ravindra Barhate blew the whistle on the Sules

• Under law, if someone wants to buy government land that is in the possession of a trust as an occupant, the buyer should first approach the collector and seek his/her permission. The buyer needs to pay 50 percent of the market value to the state treasury, after which the collector can pass an order permitting the sale
• But Prem Sagar Hotels bypassed the law by directly approaching the Charity Commissioner and sought his no-objection certificate. He had no authority to grant the permission for a property that is not owned by the trust
• Still, the commissioner issued the order dated 31 May 2005 and granted the patently illegal permission. The Congress- NCP combine is in power in Maharashtra since 1999. The commissioner works under the state government
• Shockingly, the Revenue Department also turned a blind eye to the alleged illegality and passed the mutation order dated 2 August 2005, transferring the title to Prem Sagar Hotels
• In 2011, Barhate exposed the scam by procuring the documents under the RTI Act
• In April 2011, Eknath Khadse, the Leader of the Opposition in the Maharashtra Assembly, raised the issue on the floor of the House. Chief Minister Prithviraj Chavan ordered an inquiry to be conducted by the divisional commissioner
• In March 2012, the divisional commissioner submitted the report confirming that the said land belonged to the government and the deal struck between the trust and Prem Sagar Hotels was in violation of the law
• Till date, there has been no concrete action taken against either the trust or Prem Sagar Hotels. Currently, the construction of an IT park is in full swing at the said land
• After the completion of construction, a 10.7 lakh sq ft of developed land would be put on sale. The current market rate in the area is Rs 20,000 per sq ft. The company is slated to raise a revenue of Rs 2,146 crore
• When contacted on email, Chordia said that Supriya never held shares in Prem Sagar Hotels. Upon this, TEHELKA emailed him back saying, "As per the ROC records available with TEHELKA, Sadanand Sule has 2.5 lakh shares of Rs 10 each in Prem Sagar Hotels, which amounts to 10 percent equity. The Articles of Association of Panchsheel Techpark Pvt Ltd says that Prem Sagar Group means Sadanand Sule, Supriya Sule, Atul Chordia, Sagar Chordia, Varsha Chordia, Anne Fernandes and Prem Sagar Hotels. Do you confirm or deny this?" Chordia didn't respond
The Sharad Pawar government gave away land to a trust run by a builder on which the Sules later set up a massive IT park
• In 1989, when Sharad Pawar was CM, the then Pune Collector Srinivas Patil passed an 'illegal' order and gifted away 326 acres to a trust named Mukund Bhawan Trust controlled by Niranjan Hiranandani. The trust got the land absolutely free. Even before the transfer order was passed, the trust signed an MoU with Vinod Goenka, who, along with his partner Shahid Balwa, is one of the prime accused in the 2G scam case. Later, the same Pune Collector took voluntary retirement and joined Pawar's Nationalist Congress Party. He won two successive Lok Sabha elections in 1999 and 2004
• In 1992, the Revenue Department (Pawar was called to the Centre to head the defence ministry in Narasimha Rao's government and Sudhakarrao Naik became CM) challenged the Pune Collector's order and the consent decree signed as a result of this order in a court of law. The department called the earlier order passed by the previous collector a colossal mistake and pleaded with the court to revoke the land transfer as it was illegal and against public interest
• On 10 March 2003, the Sushilkumar Shinde government did an out-of-court compromise with Goenka's trust and gave away around 79 acres in the heart of Pune for free. Shinde had become CM in January 2003 by replacing Vilasrao Deshmukh, who had been heading the government since 1999. In 2004, the Congress high command brought Deshmukh back. Shinde was seen as being too soft on Pawar, making the Congress lose ground to the NCP in the 2004 Assembly election
• On 25 November 2003, Pawar's family and a few close friends incorporated a company named Tech Park One. The Sules own large shareholdings in the company
• On 1 October 2004, Tech Park One bought 26,000 sq m from Mukund Bhavan Trust. Property records showed that the land actually belonged to the army since 1930
• The company constructed the Panchsheel Tech Park that currently, according to industry estimates, earns an annual rent of 27 crore. Interestingly, it was Balwa's DB Realty that did all the correspondence with the Union environment ministry, which was under A Raja at the time, for green clearance for this project
• On the remaining 68 acres, Goenka and his partner Balwa are constructing three massive commercial projects
Pawar's family built a house on the Irrigation Department's land at Rihe village in Pune district
• On 18 October, YP Singh highlighted how Ajit Pawar gave away hundreds of acres for a pittance to a company controlled by the Sules when he was the irrigation minister
• Two weeks ago, TEHELKA did a cover story exposing the Rs 70,000 crore irrigation that happened under his watch. We now bring out another instance of his abuse of power in which he manipulated land records to facilitate the grabbing of 31,000 sq ft of irrigation land by his cousin Srinivas Pawar and his wife Sharmila. Records with TEHELKA show that the land title was in the name of the Irrigation Department since 1983. But in 2004, the Pawars constructed a sprawling bungalow that they use as a weekend retreat
• In July 2012, Barhate exposed the land grab and lodged a complaint. The Irrigation Department wrote back saying that the said land was recorded as revenue land by mistake and now they were transferring it back to the farmer
• If this was not enough, Srinivas and Sharmila Pawar allegedly transferred more than 1 lakh sq ft of agricultural land belonging to a Dalit in their names. The illegal land transfer occurred in 2011
• In July 2012, the victim, Manohar Gajarmal, filed a FIR with the Paud Police Station against the Pawars. The police officer who showed the temerity of registering the FIR was transferred within a week
• Gajarmal showed TEHELKA the old revenue records which apparently show that he is the actual owner of the land, but alleged that the Pawars, in league with revenue officers, fudged the records and transferred the land in their names
• He says the Pawars own several other tracts of land in the same village and they wanted him to sell them his land so that they could have a contiguous stretch of land. But when Gajarmal refused, the Pawars allegedly manipulated the land records in their favour.
Ashish Khetan is Editor, Investigations with Tehelka.


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